TP-LINK Taking Over Wireless Industry, One Router at a Time
In a market that is increasingly becoming commoditized, TP-LINK has been gaining ground on incumbent SOHO networking providers. According to a recent report by American research firm, In-Stat, based on shipment data from the fourth quarter of 2010, TP-LINK now leads the World in wireless and broadband CPE device shipments, after only 5 years on the international stage.
This is no small feat, given the entrenched competition, with larger players D-Link, Netgear, and Networking giant, Cisco’s Linksys having dominated the market for a number of years. “We were able to make it to this point using the same strategy that we used from the outset”, says TP-LINK’s Marketing Manger, Kevin Chen. “Make great products affordable; bring the highest value to the market and you will eventually win the hearts of your customers.”
TP-LINK got started in 1996 in China by the endeavors of two young brothers, recently graduated and equipped with the know-how and the drive to bring their first ISA-bus 10M LAN card and 10M 8/16-port Hubs to market. Within two years they had a thriving business, their own factory and an increasingly diverse product line. Where many Chinese manufacturers were producing as many products as they could for as cheaply as possible, the brothers stuck to a few key principles that have permeated their business model and the TP-LINK brand. Most important of these was perhaps their commitment to quality, the foundation of the business, that has since only improved.
A testament to the success of this strategy is perhaps the company’s RMA, which worldwide, stands at below 1%, that is, less than 1% of products are ever returned due to a defect. As many home networking users would attest, wireless products are not exactly known for their exceptional reliability; in providing end-users with products that work as advertised, TP-LINK, while by no means revolutionary, has found a path to growth that has seen the company capture the Chinese SOHO networking market in 2004, now the world’s largest Internet market with 457 million users according to the China Internet Network Information Center (CNNIC), and now the global wireless and broadband CPE markets as well.
The picture wasn’t always this rosy for TP-LINK, however, where at one point product engineers were flying all over China to assess DSLAM issues with products in end-users’ homes and creating new firmware for specific regions on the spot, communicating with engineers at the company’s headquarters in Shenzhen. Once a product was operating at its optimal level, the engineers would save the source code and back the case file up on the company’s database; now with sixteen years worth of cases numbering in the millions. This practice, while in part intended to correct an existing problem at the time, has become a preemptive tool, both in the initial product testing phase as well as in the training of new hires, of which there are a great many, with over a thousand R&D and testing engineers on staff. New engineers are exposed to these experiences as soon as they begin their tenure at the company, giving them insight into what has been and the ability to foresee technical issues before they happen.
Testing has become somewhat of a religion now at TP-LINK, with over 100 engineers dedicated exclusively to the quality control practice; and they need every single one of them. Before a new product is shipped, it gets tested in 7000 unique scenarios, with the stipulation that, if one test is failed, the testing phase starts all over again, until the product is flawless.
It seems to be working, TP-LINK is growing rapidly within the SOHO networking market and gaining on its competitors around the globe, at last count with products available in 119 countries and 21 branches abroad, the company has achieved a phenomenal growth rate of 140% since 2005. To characterize the driver of this success, TP-LINK’s Director of International Business, Jeffrey Chao quotes a Chinese idiom, “Gong Dao Zi Ran Cheng” (功到自然成); Great effort will undoubtedly lead to success.
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